Stocks of EIH Associated Hotels today plunged by more than 6% in morning trade, a day after the board of directors of the Oberoi group company approved a Rs 110-crore rights issue.
Shares of the company opened on a weak note and declined 6.51% to touch an early low of Rs 147.75. Later, the scrip pared some losses and were trading down 1.93% at Rs 155 at 1039 hrs.
On the National Stock Exchange, the stock opened at Rs 158.50, and fell further to an early low of Rs 154.30, down 2.16% from its previous closing price.
The board has approved raising of up to Rs 110 crore through a rights issue. The announcement was made after market hours yesterday.
Marketmen said the fall in the counter is largely due to profit booking and on account of equity dilution worries. After the company announced its rights issue plans the stock had surged 18.67% to touch an intra-day high of Rs 180.50 and closed at Rs 164.05 on March 26.
The stock has lost as much as 4% in the last two trading sessions and today's fall extended the downtrend further.
The board has also approved amalgamation of EIH Associated's wholly-owned subsidiary Island Hotel Maharaj Ltd with the company.
EIH Associated Hotels, an associate company of Oberoi Group's EIH Ltd, manages and operates five star hotels in major tourist destinations in India.